It’s no secret that these days, digital marketing is paramount for the success of any business.
So, you pour a good chunk of your marketing budget into digital marketing, but how do you know if those efforts are working? It’s all about ROI analysis.
2017 marks a year of huge transition in the marketing industry. Did you know that this is the first year in which more dollars are predicted to be spent on digital marketing than television marketing? According to eMarketer, “In 2017, TV ad spending will total $72.01 billion, or 35.8% of total media ad spending in the US. Meanwhile, total digital ad spending in 2017 will equal $77.37 billion, or 38.4% of total ad spending.”
Analyzing digital marketing ROI accurately can be a challenge. That’s why we’re sharing these 7 solutions to help you gather and understand the data.
1. Think of Digital Marketing as Its Own Sales Funnel
If you’re not familiar, a sales funnel is a way to visualize your marketing efforts and analyze any holes in the plan that are allowing potential customers to pour out.
The goal is to cast a wide net around your target demographic with an effective strategy to gather the most click-throughs. Then, you need to seal the deal to convert those customer leads into sales or some other meaningful action.
Scan your digital marketing efforts for efficacy based on the tiers of the sales funnel. For example, are you losing potential customers off the bat because of a lack of brand awareness?
Customers’ attention spans are shrinking while their expectations are rising. The average attention span of an internet user is only 8 seconds. That is smaller than the 9-second attention span of a goldfish!
Analyzing the way customer leads interact with your digital marketing. Do emails generate more click-throughs than tweets? What about an Instagram ad?
Find the avenues with the most traffic and compare sales data. This will help you follow the path of the customer experience, and solve any holes in your sales funnel along the way.
2. Set Up Checkpoints
Develop a plan for each of your marketing efforts, including pre-set checkpoints to analyze ROI.
Say you set a checkpoint for two weeks after the release of your campaign. You may not have made all the marketing money back yet, but you can analyze the ROI to see if you’re on the right track.
If the data proves that your efforts are not producing enough results, have a plan to tweak aspects of the campaign. For example, you could change the time of day you’re posting ads or rewrite the call to action on your ad copy.
Changing the geographic targets of your digital marketing funnel can also bring performance improvements.
For example, the marketing campaign for your law firm in Palo Alto initially targeted Palo Alto and neighboring cities of Mountain View, Menlo Park and Sunnyvale. But after review, you see benefit in widening the geographic reach to the greater San Francisco Bay area and you specifically target cities like Oakland, Berkeley and San Francisco.
This tweaking will help you analyze how effective your digital marketing efforts are, and help improve them in real time.
3. Analyze the Right Data
There are so many distinct avenues in the digital marketing frontier. However, not all of them convert customer leads into sales.
Make sure you are prioritizing the analysis of the most relevant data. To put it simply, don’t forget the importance of click-throughs while focusing on gaining followers and getting likes.
Consider the relevance of geographic data, too. For example, reducing the geographic reach of your campaign may result in higher quality leads. Your data may show a wide reach is diluting the number of qualified leads you are getting. Scenario: The marketing campaign for your high-tech company in San Jose initially targeted a comprehensive list of cities in Silicon Valley. But after review, it becomes apparent you are getting the best qualified leads from San Jose, Santa Clara and Cupertino. Adjust accordingly.
Make sure you are analyzing the right information so that you can effectively reorganize your efforts towards the most rewarding ad platforms.
If you’re not sure where to start, focus on platforms like Facebook. Facebook does a huge chunk of the data analysis for you. You’ll find analysis tools in your ad account.
This can be an incredibly beneficial way to learn about what does and doesn’t work about your digital marketing campaigns and how it’s affecting your ROI.
4. Understand the Difference Between SEO and Digital Marketing ROI
Web analytics are useful for gathering information like page views and search engine rankings.
However, web analytics won’t help you comprehensibly understand digital marketing ROI.
You need to look at the customer as a person, not a page view. Follow the customer’s journey from viewing the digital marketing to making a purchase. Which avenues generate the most click-throughs? Which are producing a low conversion rate?
SEO is definitely tied into your brand awareness and success as a business, but be sure not to confuse SEO analysis and digital marketing analysis. It will lead to a skewed perspective on the data you need to make the right calls.
5. Use Keyword Data to Your Advantage
The digital world is ever changing, especially with the constant invention of new technology and social platforms. Producing ROI from digital marketing requires an internal and external analysis of where and what people are searching.
You must consistently analyze keywords that have to do with your brand, product, or service.
One of the best tools for keyword analysis is Google Analytics. If you’re running a PPC campaign with Google Adwords, take advantage of the keyword grouping feature.
Use the broad match, phrase match, and exact match features to help searchers find your business. Don’t forget to use negative keywords to dodge unnecessary spending.
Include search keyword analysis in your digital marketing analysis to find the most likely customer leads.
6. Consider the Lifetime Value of Each Customer
How long to give each marketing campaign to decide if it is performing well enough?
The answer is different for every company, and every campaign. It depends heavily on your product or service, marketing budget, customer base, and the LTV, or lifetime value of your customers, among other factors.
However, the part of the answer that applies to every company is clear. The marketing plan is only sustainable if more money is being made than being spent.
Analyzing the LTV of each customer can help to shape a successful digital marketing budget and analyze your long term ROI.
7. Up Your Game With a Consulting Service
Hiring a trusted consulting service like SafeHouse Web is a great way to take the pressure off.
Allow experts with the right tools and experience to analyze and improve your digital marketing and web presence while you focus on the heart and soul of your business.
It’s far better to outsource for areas outside of your expertise than to let your business suffer by spreading yourself too thin.
Don’t waste time on underperforming areas of your digital marketing campaigns.
If you are not seeing a return on investment, take a hard look at the data and come up with a new plan before wasting more ad dollars.
This is also why accurate analysis is so key to a successful marketing plan. Run with the digital marketing strategies that are working and ditch the ones producing nothing more than tumbleweeds.
What are your top tips on measuring digital marketing ROI? Keep the conversation going by commenting below!